Poland needs to enter ERM 2 and soon

Poland must enter the exchange rate mechanism ERM 2 at the latest in the second quarter of 2009 in order to be ready to adopt the euro in 2011, a member of the central bank's Monetary Police Council (MPC) Jan Czekaj said on Thursday. However, analysts say the target is ambitious and chances of Poland meeting the deadline are slim.

Poland needs to spend at least two years in the ERM 2 zone before it can join the euro, but Jan Czekaj is the first policy maker to announce that if Poland intends on keeping 2011 as the date when Poles swap their złoty for euro, the country must enter the zone in the first half of next year.

"As there is a clear declaration to meet the [euro] criteria in 2011…we must enter the ERM 2 mechanism in the second quarter of 2009 at the latest," Czekaj told TVN CNBC.

Analysts and economists have said the target is ambitious, while Prime Minister Donald Tusk's officials have said that Poles will not start using the common currency before 2012.

Meanwhile, on Wednesday central bank governor Sławomir Skrzypek said that Poland should change its constitution first, before entering the ERM 2 zone. Changing Poland's constitution is one hurdle that may delay the process of adopting the euro as the government will need the support of at least some members of the main conservative, euroskeptic opposition Law and Justice (PiS) party. PiS has openly said its opposed to the euro.

Source: Reuters